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The Fiscal Stakes Are High as Sessions Eyes Marijuana Crackdown

BRENDAN MCDERMID

By Michael Rainey

January 4, 2018

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Attorney General Jeff Sessions’ decision to rescind an Obama-era rule that allows states to regulate marijuana sales without federal interference lit up Washington Thursday. The move, expected to be announced formally on Friday, raises the possibility of a federal crackdown on marijuana sales at the state level, although the final impact of the rule change remains to be seen.

A record number of Americans — 64 percent — now support marijuana legalization, according to Gallup. And with local governments increasingly looking to marijuana sales as a source of tax revenue and economic growth, Sessions can expect to see resistance from the states that have already legalized pot sales or are considering doing so soon.

The fiscal stakes are sizable. According to a new report from the market research firm The Arcview Group, “Conservative estimates show more than $1 billion in wholesale, excise, and cannabis-specific sales taxes were taken into state treasuries during 2016. That number is forecast to grow to just over $1.4 billion in 2017 and then to nearly $2.8 billion by 2021. With additional state and local general sales taxes, that 2021 figure could be between $4 billion and $4.7 billion.”